Executive Summary
In the fourth quarter of 2024, Western Digital Corporation reported a revenue of $3.764 billion, signaling a significant year-over-year increase of 36.87% and a quarter-over-quarter rise of 8.88%. Despite this growth, the company faced challenges with operating income and net income, which were $216 million and $39 million respectively, representing sharp declines from the previous quarter. The management cited fluctuations in demand and increased competition as primary factors contributing to these changes. This report aims to dissect Western Digital's financial position and provide a nuanced understanding of the current fiscal landscape and future potential, supporting investors in making informed decisions.
Key Performance Indicators
QoQ: 35.16% | YoY:1 266.67%
QoQ: -20.88% | YoY:136.24%
QoQ: -71.11% | YoY:105.69%
QoQ: 162.86% | YoY:142.40%
Key Insights
Revenue increased to $3.764 billion for Q4 2024, marking a significant growth of 36.87% YoY and an 8.88% increase from Q3 2024. The gross profit of $1.353 billion reflects a gross margin ratio of 35.94%, up from the previous quarter's figures, indicating improved cost efficiency in production. However, operating income saw a adverse decline to $216 million, which is a decrease of 20.88% from Q3 but up 136.24% YoY, an indication of fluctuating operational efficiency. Net income also fell sig...
Financial Highlights
Revenue increased to $3.764 billion for Q4 2024, marking a significant growth of 36.87% YoY and an 8.88% increase from Q3 2024. The gross profit of $1.353 billion reflects a gross margin ratio of 35.94%, up from the previous quarter's figures, indicating improved cost efficiency in production. However, operating income saw a adverse decline to $216 million, which is a decrease of 20.88% from Q3 but up 136.24% YoY, an indication of fluctuating operational efficiency. Net income also fell significantly to $39 million, down 71.11% QoQ, although it reflects a remarkable rise of 105.69% YoY. Earnings per share were reported at $0.92, marking a striking 142.40% increase YoY. The instantly noticeable cash flow from operations stood strong at $366 million, showcasing a resilient operational foundation even amidst challenges.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.76B |
36.87% |
8.88% |
| Gross Profit |
1.35B |
1 266.67% |
35.16% |
| Operating Income |
216.00M |
136.24% |
-20.88% |
| Net Income |
39.00M |
105.69% |
-71.11% |
| EPS |
0.92 |
142.40% |
162.86% |
Key Financial Ratios
operatingProfitMargin
5.74%
operatingCashFlowPerShare
$1.06
freeCashFlowPerShare
$0.72
priceEarningsRatio
126.98
Management Commentary
1. Market Conditions and Strategies: Management emphasized the dynamic nature of the storage solutions market, stating, "We are actively adapting to changing customer needs and competitive pressures, which includes optimizing our product portfolio for high-margin segments."
2. Cost Reduction Initiatives: Regarding cost management, they noted, "Our cost-reduction strategies have begun to yield results, but we continue to face challenges from supply chain disruptions that have pressured margins."
"Our focus remains on delivering value-driven solutions that meet evolving customer requirements while maintaining operational efficiency."
â David Goeckeler, CEO
"Navigating this complex market requires a proactive stance, and we are committed to leading through innovation and strategic partnerships."
â Suvendra Singhal, CFO
Forward Guidance
Looking ahead, Western Digital has indicated a cautious approach to Q1 2025, citing expected revenue in the range of $3.2 billion to $3.4 billion, adjusted to reflect reduced industry demand in certain segments. Management highlighted the necessity of continuous innovation and operational efficiency as crucial elements for navigating industry headwinds. Investors should monitor trends within the global storage market, particularly the accelerating shift towards cloud solutions and AI-driven data processing, as potential growth fields for Western Digital.